Production-Sharing Agreements: An Economic Analysis

Production-Sharing Agreements (PSAs) are among the most common types of contractual arrangements for petroleum exploration and development. Under a PSA the state as the owner of mineral resources engages a foreign oil company (FOC) as a contractor to provide technical and financial services for exploration and development operations. The state is traditionally represented by the government or
one of its agencies such as the national oil company (NOC). The FOC acquires an entitlement to a stipulated share of the oil produced as a reward for the risk taken and services rendered. The state, however, remains the owner of the petroleum produced subject only to the contractor’s entitlement to its share of production. The government or its NOC usually has the option to participate in different aspects of
the exploration and development process. In addition, PSAs frequently provide for the establishment of a joint committee where both parties are represented and which monitors the operations.

By: K. Bindemann

Latest Tweets from @OxfordEnergy

  • Jonathan Stern quoted in New York Times on E.U. Settlement with Russia’s Gazprom Over Antitrust Charges: If the com… https://t.co/CgM6XYsvkw

    May 25th

  • OIES’s @thierry_bros quoted on EU Gazprom antitrust settlement in https://t.co/6urUydHjd3 – with some companies ha… https://t.co/Jln2ExsonP

    May 25th

  • A new OIES paper on decarbonisation of heat in Europe: Heating and cooling sector moving towards low carbon energy… https://t.co/ZN70d6WTZj

    May 25th

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.